Under the federal Real Estate Settlement Procedures Act and New York State license law, a licensed agent in any state can refer a client to a NYC agent and collect a referral fee at closing, with no New York license required. The one condition that decides whether it goes smoothly: the referral has to be set up in writing before any work begins. In my 25+ years as a Licensed Real Estate Associate Broker with Keller Williams NYC, most out-of-state referrals I receive come from an agent whose client just took a job in Manhattan or is buying a second home, and the ones that close cleanly all start the same way.
If you have a client moving to or investing in New York City, referring them to a local specialist protects your client and pays you at closing. This guide covers whether agent referrals are legal here, the REBNY referral agreement, how the fee is structured and paid, and how to vet a partner before you hand over a client you have worked hard to earn.
Are agent referral fees legal in New York?
Yes. Referral fees paid between licensed real estate brokers and salespersons are permitted under New York Real Property Law and RESPA. RESPA expressly allows a fee for referring real estate brokerage business between licensed professionals; what it prohibits is paying an unlicensed person for sending settlement business their way. The practical rules are short:
- Both the referring agent and the receiving agent must hold active licenses in good standing in their own states.
- The fee is paid broker to broker, then split inside each brokerage per its own agreement with its agent.
- No New York license is required to refer a New York client and get paid.
- The arrangement is documented before the work starts, not after a deal is already moving.
RESPA in one line
A referral fee between two licensed agents is legal. A fee paid to an unlicensed person for sending settlement business is not. Keep it licensee to licensee, and put it in writing.
How a NYC referral actually works
The mechanics are simple when you keep them in order:
- You contact the NYC agent and share your client's goals, timeline, and budget.
- Both brokerages sign a standard REBNY referral agreement before the client is contacted.
- The NYC agent represents your client through the search, the offer, and the closing.
- You receive updates at each milestone, and your fee is paid at closing with a copy of the settlement statement.
I keep a standing agent referral program for exactly this, with the agreement ready to sign and a one business day response, so your client never sits waiting.
The REBNY referral agreement
A referral agreement is a short, standard document that protects both brokerages. It is signed before the receiving agent contacts your client, so your fee is locked in from the start. It names the client and the transaction type, states the referral fee as a percentage of the gross commission the receiving brokerage earns at closing, confirms both sides hold active licenses, and sets a validity window, usually 12 months, covering that client. Sign it first; that single habit prevents almost every referral dispute I have seen.
Active NYC Listings
A sample of what your client could be looking at across NYC
1601 3rd Avenue #28J
Upper East Side
355 Humboldt Street #1
Williamsburg
Listing information provided courtesy of the Real Estate Board of New York's Residential Listing Service (RLS). Information is deemed reliable but not guaranteed. Sale listings verified. ©2026 REBNY. RLS data displayed by Keller Williams NYC.
How the referral fee is structured
The fee is a percentage of the gross commission the receiving brokerage earns at closing, agreed in writing up front. The exact percentage varies with the market, the complexity of the deal, and how much each side does, so it is a conversation rather than a fixed rate. What matters more than the number: it is set before work begins, paid promptly at closing, and documented with the settlement statement so your accounting reconciles to the dollar. Be wary of any arrangement that leaves the fee vague or unsigned until the deal is already in motion.
Have a client headed to NYC?
Send the referral and I will respond within one business day with the agreement ready to sign.
Refer a ClientWhy a NYC client needs a local specialist
New York is not a typical market, and a referral to the wrong person reflects back on you. Co-op purchases run through a board package, a stack of financials and references followed by an interview that can sink an otherwise strong buyer. Condos have offering plans to read. Rentals fall under the FARE Act, which changed who pays the broker fee. Each of the five boroughs prices and trades differently. A local agent who has closed co-op board packages, condo offerings, and townhouse sales protects your client through all of it, and bilingual service in English and Spanish matters for many relocating and international buyers. Your client gets a real expert; you get a clean, well-documented referral.
How to vet a NYC referral partner
Before you hand over a client, confirm the partner the way you would want yours vetted. A quick checklist I would use:
Credentials
- Active license in good standing
- REBNY and NAR membership
- Years in the client's borough
Fit and follow-through
- Track record in co-ops vs condos
- Clear update cadence for you
- Bilingual if your client needs it
- Will sign the referral agreement first
For more on the local process your client will go through, see my NYC buyer guide and current neighborhood market reports. You can also read what past clients say on my reviews page.
Bottom line
An agent referral is one of the cleanest pieces of business in real estate: legal between licensees, paid at closing, and good for the client when the local partner is the right one. Set it up in writing first, confirm the fee in the REBNY agreement, and pick a NYC specialist who treats your client and your reputation as their own.
Ready to refer your NYC client?
See the Referral Program
